Gold Recovers Rs 9,500 Loss to Conclude Volatile Budget 2026 in Green; Silver Holds Steady
ETMarkets.com
Domestic gold staged a remarkable recovery, bouncing back from an intraday loss of approximately Rs 9,500 per 10 grams — nearly 7%. After hitting a day’s low of Rs 1,38,634 per 10 grams, gold settled at Rs 1,48,104. Despite an initial gap-up opening for gold futures, the market experienced significant downward pressure due to profit booking leading up to the Budget 2026 announcements.
– Trading Insights:
– As trading progressed, losses deepened on the MCX, extending Friday’s sharp declines.
– March silver futures ended the session unchanged at Rs 2,65,652 per kg on the MCX.
The market sentiment was further impacted by the lack of major announcements for the domestic jewellery sector. Amid a surge in gold and silver prices over the past year, the bullion industry had anticipated budget incentives to alleviate pressures.
– Market Dynamics:
– A World Gold Council (WGC) report indicated that India’s jewellery consumption plummeted by 24% year-on-year to 430.5 tonnes in 2025, despite demand value soaring to a historic $49 billion.
– Dr. Renisha Chainani, Head of Research at Augmont, indicated that the bullion industry sought support to mitigate cost pressures, specifically asking for:
– Reductions in import duties on gold, cut & polished diamonds, and coloured gemstones.
– GST rationalization and simplified customs procedures.
– Policy measures to enhance India’s status as a global diamond trading hub.
However, the budget presented did not include substantial tax cuts or import duty reductions tailored for the gems and jewellery sector.
Gold and Silver Price Movements
On Friday, silver witnessed an unprecedented drop on the MCX, plummeting up to 27% or Rs 1,07,968 in just one day, marking its steepest decline ever and retreating below the Rs 3 lakh threshold, following a record high of Rs 4 lakh.
– Gold prices experienced a staggering 12% or Rs 20,514 decrease on January 30 — the most significant single-day loss since March 2013.
– “Selling pressure on the MCX intensified today, with both metals encountering lower circuits, sliding 9% earlier and compounding the previous Friday’s losses of 17% in gold and 27% in silver,” stated Kaynat Chainwala, AVP Commodity Research at Kotak Securities.
Currently, gold is trading 5% lower after a modest recovery, while silver remains in decline as traders approach the Union Budget with caution regarding potential changes to import duties on precious metals. Kaynat Chainwala also mentioned, “Globally, we may face further downside pressures at the beginning of the week as higher CME margins come into effect on February 2.”
In conclusion, while gold managed to recover from significant losses during the volatile Budget 2026 session, the lack of targeted support for the jewellery sector continues to raise concerns. As the market adjusts, stakeholders remain alert to potential influences from upcoming global trends and policy changes.